More deals for DiMasi's friends
Speaker's associates got work as Cognos got state contract
Software company
The involvement of lawyer Steven J. Topazio and accountant Richard D. Vitale adds two more names to what has become a roster of close DiMasi associates who received Cognos-related money as the company was doing lucrative, though highly controversial, business with the state.
DiMasi took an active interest in a software contract awarded to Cognos in 2007 that has been sharply criticized by the state inspector general and revoked by the state. The contract award is now under investigation by the State Ethics Commission.
Topazio and Vitale could prove problematic for DiMasi because the two maintained business relationships with the speaker as they were accepting money from Cognos or from the company's independent sales agent, Joseph P. Lally.
DiMasi declined to be interviewed or to respond to written questions about the ties between his business associates and Cognos. Lally, through his lawyer, also declined to comment.
Topazio, a lawyer who has maintained a private law practice with DiMasi, acknowledged in an interview that he was hired by Cognos, though he declined to divulge his role, other than to say it related to a "legal matter."
As Lally worked on Cognos contracts, he also paid undisclosed sums for consulting services to a firm founded and operated by Vitale, DiMasi's accountant and former campaign treasurer, according to two people with knowledge of the business relationship.
For Vitale, it is the second known instance in which he was paid by outside interests who were trying to influence State House actions on issues that ultimately the House of Representatives acted upon favorably. The Globe reported in April that Vitale was paid thousands of dollars by an association of ticket brokers to help push through the House legislation that deregulated its industry.
In addition to working as DiMasi's personal accountant, Vitale's financial relationship with DiMasi was expanding around the time of his work with the ticket brokers and Lally. In July 2006, Vitale gave an unusual $250,000 third mortgage to DiMasi at below market rate.
Since the Globe reported in late April on Vitale's work with the ticket brokers and his mortgage loan to DiMasi, Vitale has resigned from his accounting firm, DiMasi has said he paid back the loan in full, and the secretary of state required Vitale to register as a lobbyist and referred the matter to the attorney general for possible prosecution.
Vitale, through his spokesman George Regan, declined to comment this week about his work for Lally. His lawyer, the late Richard Egbert, initially asked for questions in writing with a promise he would answer them. After Egbert received the questions, Regan issued a statement saying, "As we have emphasized for weeks, we are not going to engage in a public dialogue on this matter, nor are we going to respond publicly to every question asked by the Boston Globe." Egbert died last week, apparently of a heart attack.
Topazio, interviewed in his downtown law office, where DiMasi's name is on the entry, confirmed he was paid by Cognos at Lally's behest. Although Topazio and DiMasi have previously shared expenses, Topazio said none of the money he received from Cognos benefited DiMasi financially and denied lobbying the state on Cognos's behalf.
"I know what people will think when they see that I received money from Cognos," he said. "But all I can say is it had nothing to do with any contracts they were seeking from the state or anyone else. All I can say is that it's not what you think."
Topazio would not say how much he received, though two individuals aware of the relationship said it amounted to less than $10,000 annually. He said Lally was referred to him by someone close to the speaker, but he would not identify the person.
With Lally as the high-powered salesman and DiMasi providing a powerful political push for the kind of software that Cognos produced, Cognos was successful in its quest for Massachusetts business, landing at least two major contracts, one for $4.5 million in 2006 for the state Department of Education and then a controversial $13 million contract in 2007 for the Executive Office of Administration and Finance.
Several months before the Patrick administration signed the 2007 contract for "performance management software," DiMasi told a key state technology official that the Commonwealth should purchase such software, without specifically naming Cognos. A 2007 bond bill that paid for the software was approved by the Legislature in a week, with DiMasi's support.
When Lally and Cognos sought funding for the $4.5 million Department of Education contract in 2006, it came in the form of a House budget amendment, which DiMasi described to House colleagues as a priority, according to an official involved in budget deliberations.
While winning the contracts, Lally took aggressive steps to advance Cognos's interests. He boasted to state officials about his ties to DiMasi, offering a job to a key staff member of the Department of Education who oversaw the $4.5 million procurement. Lally and Cognos also sponsored a charity golf tournament hosted by DiMasi, in honor of Vitale's late brother, in 2004, 2005, and 2007.
Also working on Cognos's behalf during this period was lobbyist Richard McDonough, another close friend of DiMasi's, who was paid hundreds of thousands of dollars to help the company secure state work. He failed to report more than $300,000 in lobbying fees until a Globe story earlier this month detailed his extent of his relationship with Cognos.
Topazio and DiMasi have shared a law office since the mid-1980s. Although they were never formally partners, they divided expenses. Sometime after DiMasi was elected speaker in late 2004, Topazio said, DiMasi sold his practice to Topazio and became "of counsel." In that role, he receives a percentage of the fees paid by clients he refers to Topazio. Topazio said he believes all of DiMasi's current law income comes from those fees.
Last year, DiMasi reported earning between $20,000 and $40,000 from his law practice. In 2005 and again in 2006, he reported earning between $60,000 and $100,000, according to state ethics filings.
DiMasi has had a different financial relationship with Vitale. On July 21, 2006, Vitale - through his company, Washington North Realty Trust - gave DiMasi a $250,000 revolving line of credit secured by a third mortgage on the speaker's Commercial Street condo.
Vitale, through a separate company called WN Advisors, worked for Lally's private software resale firm, Montvale Solutions, according to two people with knowledge of the business relationship. Lally had been the Cognos vice president of government sales, and when he left the company earlier that year to go on his own, he was allowed to take several key accounts with him, including the Commonwealth of Massachusetts, which had been his customer.
As a business partner of Cognos, Montvale Solutions was able to generate huge commissions, described by several former employees as 20 to 25 percent of a contract's value. It was Montvale Solutions that acted as a broker for both the $4.5 million Education Department contract and the $13 million contract with the Administration and Finance office.
After rejecting a Globe request for an interview on the Cognos-related payments to his associates, DiMasi asked for written questions, but later refused to answer them or provide a statement. In prior interviews, DiMasi has insisted he never interceded on behalf of Cognos and was unaware that Vitale worked for the ticket brokers. In a letter to House members in May, DiMasi blamed friends and associates for taking advantage of his position, behavior he said he could not control.
"Like any of us, I do not control the conduct or actions of others," wrote DiMasi. "As elected officials, we in the Legislature are all subject to the unfortunate inclination of others to use our name without our knowledge or authorization."
Both the Department of Education and the administration's computer software contracts have drawn controversy in recent months.
In March, the office of Inspector General Gregory Sullivan sharply criticized the administration for rushing through the purchase in violation of basic bidding rules. That contract has been canceled and the money returned to the state.
Andrea Estes can be reached at estes@globe.com. Stephen Kurkjian can be reached at kurkjian@globe.com.
